Not during the coming collapse. I’m talking about your money flowing through the bank right now, today, this paycheck. Is it safe there? If you think so, you might want to note that civil asset forfeiture is in the news again.
This is the recent local news article, basically re-highlighting the government abuses as it talks about one high profile case that has finally wrapped up. But you might have missed all the actual journalism that some news sources did on the matter in 2014. Maybe you skimmed over it because many of the reports were framed as “Look at this awesome thing Obama and Holder are doing for the people (ignore the loopholes they created, though).” Or maybe it just got lost in the narrative noise about the 2014 elections and the ramp up to the 2016 presidential election and how those evil republicans want to regulate every pair of ovaries in the nation while pushing seniors off of cliffs and giving guns to children. Or something. Leftist thinking isn’t a model of rationality these days.
Civil Forfeiture and the IRS
So you probably know that moving bank sums of $10k or larger can be a pain. I recall the first time I did and was surprised that the money wasn’t showing in my account. After a talk with my bank I found out that crossing that five figure threshold meant they wanted to be extra sure the funds were legit and it would be a week to ten days before I would have access to the funds. I’ve tried to keep it under five figures ever since, just to avoid the hassle. I mean, I’m not breaking any laws and I’m not trying to hide anything, so the government will leave me alone, right?
My bank didn’t tell me about the IRS bit, and apparently they’re not allowed to. Even if directly asked, they can only provide a pamphlet written by the Feds and cannot comment:
Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk [fraud and security manager for Northwest] said. “We’re not allowed to tell them anything,” she said.
What is “structuring?”
Banks must report to the IRS all individual deposits, withdrawals or transfers of over $10,000; it’s illegal for anyone to structure multiple transactions of $10,000 or more in order to evade IRS attention, and banks are required to report if they think their customers are making many under-limit transactions to avoid triggering notification.
It is, quite obviously, 100 percent legal to make make deposits of less than $10,000. But it is illegal to do so with the express purpose of avoiding the closer IRS scrutiny that comes with larger deposits — a practice known as “structuring.”
If you’re depositing sub-$10,000 amounts because that’s all you have on you, or because you don’t want to have big piles of cash sitting around your office, or for literally any reason other than “trying to hide it from the IRS,” you are doing nothing wrong.
Sadly, the mere appearance of intent to attempt to conceal wrongdoing is all the IRS needs to clean out your bank account. NO WARRANT IS REQUIRED.
You also have to go to court TO PROVE YOUR INNOCENCE, and even then, they might try to pressure you to settling for taking back less than was seized.
And how are you going to hire a lawyer when the money you would have paid him with is in the hands of the government?
- For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000. [source]
- In one Long Island case [the Hirsch case], the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years. [source]
- Army Sgt. Jeff Cortazzo of Arlington, Va., began saving for his daughters’ college costs during the financial crisis, when many banks were failing. He stored cash first in his basement and then in a safe-deposit box. All of the money came from paychecks, he said, but he worried that when he deposited it in a bank, he would be forced to pay taxes on the money again. So he asked the bank teller what to do.
“She said: ‘Oh, that’s easy. You just have to deposit less than $10,000.’”
The government seized $66,000; settling cost Sergeant Cortazzo $21,000. As a result, the eldest of his three daughters had to delay college by a year. [source]
- Lyndon McLellan has owned and operated L&M Convenience Mart in rural Fairmont, N.C., for more than 10 years… One day last July, a group of state and federal officers showed up at his store to inform him that they had emptied his entire bank account — all $107,702.66 of it.Like many small retail operations, McLellan conducts much of his business in cash. But the Internal Revenue Service didn’t like the way he deposited it in his bank account. On the advice of a bank teller, McLellan made most of his cash deposits in chunks of $10,000 dollars or less. There’s less paperwork involved with sub-$10,000 deposits, and some companies have insurance policies that only cover up to $10,000 in cash losses. [source]
So I’m Safe If I Stick With Cash?
Sadly, no. The IRS doesn’t really care about your cash. They only care about what’s going in and out of your bank account. But the DEA cares about your cash. They care enough that they’ll hang on to it for you, just so you don’t accidently use it for drug deals or something.
- All the money – $16,000 in cash – that Joseph Rivers said he had saved and relatives had given him to launch his dream in Hollywood is gone, seized during his trip out West not by thieves but by Drug Enforcement Administration agents during a stop at the Amtrak train station in Albuquerque. [source]
- A 55-year-old Chinese American restaurateur from Georgia was pulled over for minor speeding on Interstate 10 in Alabama and detained for nearly two hours. He was carrying $75,000 raised from relatives to buy a Chinese restaurant in Lake Charles, La. He got back his money 10 months later but only after spending thousands of dollars on a lawyer and losing out on the restaurant deal. [source]
- A 40-year-old Hispanic carpenter from New Jersey was stopped on Interstate 95 in Virginia for having tinted windows. Police said he appeared nervous and consented to a search. They took $18,000 that he said was meant to buy a used car. He had to hire a lawyer to get back his money. [source]
- Mandrel Stuart, a 35-year-old African American owner of a small barbecue restaurant in Staunton, Va., was stunned when police took $17,550 from him during a stop in 2012 for a minor traffic infraction on Interstate 66 in Fairfax. He rejected a settlement with the government for half of his money and demanded a jury trial. He eventually got his money back but lost his business because he didn’t have the cash to pay his overhead. [source]
- On Nov. 1, 2011, Jose Jeronimo Sorto and his brother-in-law, Victor Ramos Guzman, were driving a rented sedan on I-95 south of Richmond when a Virginia state trooper stopped them. Both were lay leaders of the Pentecostal Nuevo Renacer church in Baltimore. They were carrying $28,500 in church funds meant for the purchase of land to build a church in El Salvador and a trailer for a new congregation in North Carolina….[T]he trooper who made the stop, C.L. Murphy… told Sorto and Guzman that they were speeding and following too closely. Murphy said Guzman told him about the cash and consented to a search of the car.
Guzman, 39, of Sterling, Va., said he showed the trooper documents indicating that he belonged to a tax-exempt church, and he said the cash had been collected from congregation members. But Murphy disregarded their explanations, saying they contained inconsistencies… He did not issue a ticket but seized the cash. [source]
I was especially surprised to find this little gem in the dissenting opinion of United States of America, Plaintiff, vs. $124,700 in U.S. Currency, Defendant. While the man’s story seemed very suspiciously like he was moving drug money, he was able to give a plausible explanation for all the facts, except the drug-sniffing dog alerting on the money. Note: no actual drugs were ever found. Here’s why the dissenting judge thought the drug dog wasn’t good enough to confiscate the guy’s money (emphasis added):
Here, the only evidence linking the seized money to illegal drug activity is a canine sniff that alerted officers to the presence of narcotics on the currency itself and the exterior of the rear passenger side of the rental car where the currency was discovered. However, as Justice Souter recently recognized, a large percentage ofcurrency presently in circulation contains trace amounts of narcotics. See Illinois v.Caballes, 543 U.S. 405, 410-12 (2005) (Souter, J. dissenting).…Finally, the mere fact that the canine alerted officers to the presence of drug residue in a rental car, no doubt driven by dozens, perhaps scores, of patrons during the course of a given year, coupled with the fact that the alert came from the same location where the currency was discovered, does little to connect the money to a controlled substance offense.
They Should Totally Sue!!
First, folks are pressured to sign a waiver disavowing that the cash is theirs and they have no knowledge of how it got in the vehicle or any crimes suspected with it.
Second, when they eventually win their case an average of a year later to get their money back, it is given back on condition of signing an agreement that they will not sue.
Further, while the recent reforms for which the MSM was praising Obama and Holder said a person who wins in court should be reimbursed for their legal fees and other losses, several of the exceptions allow the money to be given back in a manner which removes compensation from the table, such as voluntarily returning the money before a verdict is reached.
But It’s a Good Law Enforcement Tool!
I get that there are good and honorable LEO’s out there trying to do their best within the boundaries of the law and they really want to get the bad guys off the streets.
But when the law can no longer differentiate between a criminal and an ordinary resident innocently going about his business, we’ve got serious problems.
East Germany had a plethora of great law enforcement tools. So did Stalin’s Soviet Russia. While we’re at it, let’s drop our constitution in the shredder and let the law enforcement do whatever it takes to get every sinner behind bars. Yeah, and how’d that work out for Robespierre?
What to Do?
So the bank has a risk of the IRS cleaning you out. But even if you go cash-only (a big challenge in today’s digital economy) the DEA might clean out your wallet. And if even your small sums of cash might be tainted by drugs at some point in the circulation history, are you any better off carrying gold and silver bullion instead of greenbacks? Well, I haven’t heard about gold-sniffing dogs yet!
Note: Seek the advice of an attorney! We do not condone any illegal activities. The following are hypothetical and for educational purposes only.
- Be a hard target. The more assets you have in digital locations, the more that can be removed from you with a single keystroke. At least if you use cash, they have to physically interact with you in order to take it.
- If you do have to make a large transaction, minimize the time it spends where anyone else could access it. If you’re saving up for a purchase, stuff it in your safe until a few days before you buy. The IRS can’t clean out $500k if you only ever have $1k floating in your account.
- If you keep an emergency reserve, don’t keep it digitally. Many life events you would need it for allow enough time to go home to the safe. For those that don’t, conceal a smaller emergency sum somewhere in your vehicle or in your garments.
- If you do have to travel with a large sum of cash, drive as if you were worried about being slightly over the BAC limit. You’ll never be in this situation if you never get pulled over in the first place. On other days you can drive as you normally would (hopefully safely). Keep in mind that however much you have in the vehicle or on your person is the amount you stand to lose without a warrant.
- Realize there is no form of wealth or property you can have that the government can’t take. But they want the easy targets and the big fish. The less easy a target you are, the more likely they will pick on someone else.
- Stay under the radar. You won’t get in this fix if the government never notices you in the first place.